‘There is 35% excess capacity in Jet Air now’

Given the turbulence in the domestic aviation industry, Naresh Goyal, the chairman of full-services carrier Jet Airways, has hit task cut out. Low load factors, dip in passenger demand and volatility in aviation turbine fuel (ATF) prices have all taken a toll on airlines. And Jet Airways hasn’t remained immune. But Goyal feels that regulation has saved India from recession. The chairman speaks to DNA in Kuala Lumpur on why his carrier needs foreign pilots and what he would like from the government. Excerpts from an interview:

After the Securities and Exchange Board of India directive, a lot of promoters have declared the amount of shares they have pledged. Have you pledged any shares in Jet Airways?
No, I have not pledged any shares. All my shares are with me.

Recently, all airlines hiked their fares at the same time. There are charges of cartelisation in the industry. Your comment…
There is no cartel in the industry. The airlines have not talked to each other before raising fares.

In this age of cost-cutting you have a sizeable number of expatriate pilots who are paid much more than their Indian counterparts. Your Indian pilots want the same salaries as the expat ones. Are you planning any move towards bringing the two to the same payscale?
That is not immediately possible. See, the foreign pilots have more experience and must to be paid accordingly. We are a global airline. I cannot say only Indian pilots will fly the planes. Once the Indian pilots reach that level of experience, something can be done.

The government wants airlines to reduce fares. Do you have any demands from the government?
The government must bring down the tax rate on ATF. The taxes on ATF vary from one state to another. The government should add jet fuel to the declared goods list, where it will attract a flat 4% tax. That will help us ease our cost burden and we can perhaps reduce fares then.

But ATF prices have fallen drastically...
Yes, but we are still running losses. All airlines are in the red. There is 30-35% excess capacity at Jet Airways.

That’s the slowdown biting, not ATF prices…
Yes, and surprisingly, regulation has saved us from recession. Earlier, we were all complaining saying the sector was too regulated and we needed relaxations.

Now, the US is saying we didn’t have any regulation, we want more regulation. That’s the funny side of it.

You’re planning a pick up stake in the GMR-Malaysia Airlines aircraft maintenance, repair and overhaul (MRO) venture. What made you choose Kuala Lumpur?
Malaysia hasn’t been publicised as other big hubs such as Singapore, Hong Kong and Bangkok. Asian carriers give excellent service, and Kuala Lumpur is one of the best airports in the world.